SPECIAL REPORTS FOR FEDERAL TRADE COMMISSION. 9
in connection with the Stahlwerksverband will be taken up later
ander “Selling methods.”

THE STEEL WORKS UNION

STOCK COMPANY, DUSSELDORF (A.-G. STAHL-WERKSVERBAND).


Name, location, and preliminary remarks.—The production and
distribution of steel in Germany is thoroughly organized into an
almost absolute monopoly by means of a stock company known as
the Aktien-Gesellschaft ore or Steel Works Union
(referred to below as the Steel Verband). The first effort to organize
the German steel industry was made in 1862 when the Weissblechontor
 in Cologne for tinplate was founded, which is still in existence.
 In 1864 a cartel for steel rails was founded which was dissolved
 by the Steel Verband. The introduction of the protective
tariff of 1879 and the founding of the Coal Syndicate Company in
1893 have had an important bearing on the development of the steel
industry of Germany. The first efforts at combination were loose
associations of plants situated together, which signed contracts to observe
 a fixed minimum price. Various combinations in the forms
of cartels, pools, rings, unions, syndicates, price conventions, and
the like were in a constant state of flux and disorganization. One
principal mistake was the lack of legal incorporation of the selling
slices which gave the office no legal status to sue or be sued. ‘The
foundation of the Steel Verband in 1904 incorporated in Prussia as
a stock company, brought order out of chaos. It united the Halbreugverband
 (half-finished products) at Diisseldorf with 19 members,
 the Trigerverhand (beams) in Wiesbaden with 21 members,
the Schienen-Gemeinschaft (rails) in Essen with 24 members, and
the Schwellengemeinschaft (railway ties) in Essen with 21 members.
Organization.—The Stahlwerksverband A.-G., Diisseldorf, is an
incorporated stock company composed of 31 firms at the time of the
foundation, but through fusion among the members the number of
individual members has been reduced, although their capital stock
and annual production has been much increased.
The Steel Verband was founded on March 1, 1904, with a capital
of 400,000 marks ($95,000). The capital is only needed for the expenses
 of operating 4s office and is in no comparison to its enormous
turnover of more than a billion marks ($238,000,000) annually. The
members are held together by double contract. The first, the syndicate
 contract, designates the relation of the Steel Verband to the steel
plants who are members of the syndicate and the second contract
specifies the relations of the plants to each other. ‘The contracts
went into force from April 80, 1904, to June 30, 1912, when they
were renewed and are still in force. The contract can be amended
or annulled by two-thirds vote of all the members, 17 firms. In
case new competition should arise amounting to 2 per cent of the
entire steel production of the home market, or competition from outside
 amounting to 4 per cent, only a majority vote of the members is
redyind to amend or annul the contract.
roducts are divided into two classes, “A” and “B.” The “A”
products are half-finished steel—ingots, slabs, blooms, billets, puddled
 blooms—railroad supplies, including rails, ties, fish plates, bolts,